Millers and spinners did a cautious buying on the cotton market on Friday as uncertainties fully persisted after surprising fall in the rates of dollar versus the rupee during the week, dealers said. The official spot rate held the overnight level at Rs 6,850, they added. Prices of seed cotton in Sindh and Punjab per 40 kg was unchanged at Rs 2300-3100, dealers said. In the ready session, around 1800 bales of cotton changed hands at Rs 6925, dealers said.
Experts said that most parts of the business circle is in grip of uncertainty, sitting on the sidelines just to watch the next movement of the local currency in the terms of the dollar. They also said that the central bank would keep the rates at the current level, but on the other hand, some others were definite that the State Bank of Pakistan (SBP) may cut the rate after some time as rise in the rupee is hitting competitive of our products in the globe, particularly, textile exporters, who earn almost 55 percent of export revenue.
Cotton analyst, Naseem Usman also said that traders were guessing about the monetary policy statement by the SBP, the announcement is most likely on Saturday. Besides, reports showing that China's cotton imports fell 35 percent to 246,100 tonnes in February compared with the same month a year earlier, according to data on industry website CnCotton.com. Total imports fell 36 percent to 538,600 tonnes for the first two months of 2014. Figures for the two months combined gives a broader view of the period in which Chinese New Year holidays can skew data.
Reuters adds: Lower weekly export sales of US cotton helped push prices of the fiber down on Thursday after a three-day runup, but not before the market hit a 6-1/2 month high on a fresh burst of buying. "It's fair to assume the rally of the past three days was enough to throw the brakes on the market, and we really have to see the exports perform from here," said Sharon Johnson, senior cotton analyst at KCG Futures, a division of commodities broker Knight Capital, in Roswell, Georgia.
The most-active May cotton contract on ICE Futures US settled down 0.52 cent, or 0.6 percent, at 91.68 cents a lb after racing to a session high of 93.75 cents. That was the highest since August 16, when the front-month contract rose to an intraday high of 93.90, they said. The following deals reported as 200 bales of cotton from Ghotki at Rs 6500, same figure from Rohri at Rs 6760, 600 bales from Rahim Yar Khan at Rs 6550, 200 pales from Fort Abbas at Rs 6700, 400 bales from Haroonabad at Rs 6900 (conditional) and 200 bales from same station at Rs 6925 (conditional), they said.
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The KCA Official Spot Rate for Local Dealings in Pak Rupees
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FOR BASE GRADE 3 STAPLE LENGTH 1-1/32"
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MICRONAIRE VALUE BETWEEN 3.8 TO 4.9 NCL
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Rate Ex-Gin Upcountry Spot Rate Spot Rate Difference
For Price Ex-Karachi Ex. KHI. As Ex-Karachi
on 13.03.2014
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37.324 Kgs 6,750 155 6,905 6,905 NIL
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Equivalent
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40 Kgs 7,234 155 7,389 7,389 NIL
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